The US has sharpened its assault on China’s technology industry with a flurry of export bans and stifling restrictions on companies, an escalation that leaves Beijing with few options for retaliation.
Washington’s moves are part of a strategy to prevent China from dominating the industries of the future and arming its military with advanced weaponry, while also securing its tech supply chain by enticing chipmakers to set up shop in the US.
US President Joe Biden’s administration this week escalated those efforts, blacklisting dozens of Chinese tech firms, while signs emerged Japan and the Netherlands are aligning with US restrictions on selling crucial chipmaking equipment to China, a major blow to Beijing’s ambitions to produce advanced semiconductors.
Photo: AP
China has accused the US of protectionism, lodged a complaint with the WTO and courted chipmaking powerhouse South Korea, a key US ally. Beijing is also reportedly preparing a multibillion-dollar aid package for its semiconductor industry, a crucial sector for the global economy.
However, China does not have many options, or incentives, to go further. Any moves to block US investment threatens an economy already reeling from China’s zero-tolerance COVID-19 policies, which are being rolled back.
“China’s lack of good options is precisely why the US is striking hard and fast now with export controls,” said Rhodium Group director Reva Goujon, who advises corporate clients on US-China relations and industrial policies.
Beijing’s response to the recent US moves on semiconductors has been “very reserved,” said Wang Huiyao (王輝耀), founder of the Center for China and Globalization, a policy research group in Beijing.
The new actions unveiled this week — which follow export controls announced in October aimed at preventing China’s access to machines and knowhow to make high-end chips — placed a number of Chinese companies on a so-called Entity List, requiring suppliers to get difficult-to-obtain US government licenses.
Among the most notable firms on that list is emerging chip equipment-maker Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子), which could stifle Beijing’s efforts to create next-generation semiconductors. The machines that make the chips are among the most complicated devices produced by humans, and defy reverse engineering, making it difficult for China to develop its own domestic capabilities if it cannot get the equipment elsewhere.
“Having SMEE on the Entity List is a major blow for China’s chip sector,” said former CIA analyst Martijn Rasser, now a senior fellow at the Center for a New American Security.
“It’s the one company that Beijing saw as having potential to produce advanced chipmaking machines, which is essential for China to be a competitive force in the global semiconductor ecosystem,” he said. “Those hopes are now greatly diminished, if not dashed altogether.”
Even if China wins the WTO case, the US can veto any ruling by bringing it to the trade organization’s appellate body.
China’s best option might be to pour money into developing its own high-tech chips. Beijing is preparing to unleash a US$143 billion aid package for its chip industry, but it is not clear how much impact this might have.
“They can invest more, but the issues right now are not really a lack of resources,” Council on Foreign Relations technology analyst Adam Segal said. “It’s these technological chokepoints they are still vulnerable to.”
There is a risk that unilateral actions could alienate key US partners, Carnegie Endowment for International Peace senior fellow Jon Bateman said.
Beijing has not shown a willingness to leverage its dominance of rare earth minerals or its role as a manufacturing hub because it “has more to lose than to gain,” Bateman said.
“China has a lot of capability to retaliate, but very limited willingness to do so thus far,” he added.
EXPRESSING GRATITUDE: Without its Taiwanese partners which are ‘working around the clock,’ Nvidia could not meet AI demand, CEO Jensen Huang said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and US-based artificial intelligence (AI) chip designer Nvidia Corp have partnered with each other on silicon photonics development, Nvidia founder and CEO Jensen Huang (黃仁勳) said. Speaking with reporters after he met with TSMC chairman C.C. Wei (魏哲家) in Taipei on Friday, Huang said his company was working with the world’s largest contract chipmaker on silicon photonics, but admitted it was unlikely for the cooperation to yield results any time soon, and both sides would need several years to achieve concrete outcomes. To have a stake in the silicon photonics supply chain, TSMC and
‘DETERRENT’: US national security adviser-designate Mike Waltz said that he wants to speed up deliveries of weapons purchased by Taiwan to deter threats from China US president-elect Donald Trump’s nominee for US secretary of defense, Pete Hegseth, affirmed his commitment to peace in the Taiwan Strait during his confirmation hearing in Washington on Tuesday. Hegseth called China “the most comprehensive and serious challenge to US national security” and said that he would aim to limit Beijing’s expansion in the Indo-Pacific region, Voice of America reported. He would also adhere to long-standing policies to prevent miscalculations, Hegseth added. The US Senate Armed Services Committee hearing was the first for a nominee of Trump’s incoming Cabinet, and questions mostly focused on whether he was fit for the
IDENTITY: Compared with other platforms, TikTok’s algorithm pushes a ‘disproportionately high ratio’ of pro-China content, a study has found Young Taiwanese are increasingly consuming Chinese content on TikTok, which is changing their views on identity and making them less resistant toward China, researchers and politicians were cited as saying by foreign media. Asked to suggest the best survival strategy for a small country facing a powerful neighbor, students at National Chia-Yi Girls’ Senior High School said “Taiwan must do everything to avoid provoking China into attacking it,” the Financial Times wrote on Friday. Young Taiwanese between the ages of 20 and 24 in the past were the group who most strongly espoused a Taiwanese identity, but that is no longer
A magnitude 6.4 earthquake and several aftershocks battered southern Taiwan early this morning, causing houses and roads to collapse and leaving dozens injured and 50 people isolated in their village. A total of 26 people were reported injured and sent to hospitals due to the earthquake as of late this morning, according to the latest Ministry of Health and Welfare figures. In Sising Village (西興) of Chiayi County's Dapu Township (大埔), the location of the quake's epicenter, severe damage was seen and roads entering the village were blocked, isolating about 50 villagers. Another eight people who were originally trapped inside buildings in Tainan
RSS